CHICAGO, Feb. 11, 2015—Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today announced its fourth-quarter and full-year 2014 financial results. The company reported consolidated revenue of $196.4 million in the fourth quarter of 2014, an 8.8% increase from $180.5 million in the fourth quarter of 2013. Consolidated operating income was $46.6 million, an increase of 11.2% compared with $41.9 million in the same period a year ago. Net income was $31.5 million, or 71 cents per diluted share, compared with $31.3 million, or 68 cents per diluted share, in the fourth quarter of 2013.

For the year ended Dec. 31, 2014, consolidated revenue was $760.1 million, an increase of 8.9% compared with $698.3 million in 2013. During the second quarter of 2014, the company recorded a non-recurring expense of $61.0 million—approximately $38.2 million after taxes, or 85 cents per share—related to a previously announced litigation settlement with Business Logic Holding Corp. As a result, Morningstar reported consolidated operating income of $105.6 million in 2014, a decrease of 38.1% compared with $170.7 million in 2013. Excluding the litigation settlement, Morningstar reported adjusted operating income of $166.6 million in 2014, a decrease of 2.4% compared with 2013. Adjusted operating income is a non-GAAP measure; the accompanying financial tables contain a reconciliation to the comparable GAAP measure. Net income was $78.3 million, or $1.74 per diluted share, in 2014, compared with $123.5 million, or $2.66 per diluted share, in 2013.

Joe Mansueto, chairman and chief executive officer of Morningstar, said, “We had a good quarter, led by strong results for Morningstar Direct and Morningstar Credit Ratings. After investing heavily in the business in late 2013 and early 2014 to support our key growth initiatives, we slowed the pace of spending to better balance expense and revenue growth.”

Mansueto outlined some of the company’s 2014 key accomplishments and challenges:

Accomplishments: • We acquired two great companies, ByAllAccounts, Inc. and HelloWallet Holdings, Inc., which we expect to help us serve our core customer groups in new ways. ByAllAccounts bolsters our data aggregation capability and helps give financial advisors a more comprehensive view of their clients’ assets. HelloWallet helps workers bridge the gap between daily money management and investing for the long term. • We reached some important milestones during the year. Licensed users for Morningstar Direct were up 18% to more than 10,000, and we began beta testing the next-generation version of Direct. In addition, through our Retirement Solutions offering, we now manage more than 1 million defined contribution plan participant accounts, making us the first managed accounts provider to pass the million account mark. • Morningstar Managed Portfolios and Retirement Solutions showed year-over-year asset growth of approximately 27% and 17%, respectively. Assets under management for Morningstar Managed Portfolios were about $9.3 billion as of Dec. 31, 2014, up from $7.3 billion as of Dec. 31, 2013. Assets under management and advisement for Retirement Solutions were approximately $76.8 billion as of Dec. 31, 2014, up from $65.6 billion as of Dec. 31, 2013.

Challenges: • We settled our lawsuit with Business Logic for $61.0 million in the second quarter of 2014. While the settlement amount was meaningful, we were pleased to move forward and focus on the continued growth and success of our retirement business without the risk, distraction, and uncertainty posed by the lawsuit. • Low interest rates and the industry-wide shift to passive investment management are putting pressure on spending for many of our asset management clients. • Our Investment Advisory business continues to feel the effects of variable annuity clients moving the management of fund-of-funds portfolios in house. Revenue was about $2.3 million lower in 2014 versus 2013, and assets under advisement for these services were down $2.5 billion over the same period.

Financial HighlightsRevenue and Key Operating Metrics • Investment information revenue was $154.0 million in the fourth quarter of 2014, a 7.5% increase from $143.3 million in the fourth quarter of 2013. Morningstar DirectSM and Morningstar Credit Ratings, the firm’s structured credit research and ratings business, were the main contributors to revenue growth. Morningstar® Advisor WorkstationSM (including Morningstar OfficeSM) also contributed to revenue growth, which was offset by lower revenue for Morningstar® Principia®. The company is in the process of migrating clients from Principia to Morningstar Advisor Workstation and other Morningstar products. • Investment management revenue was $42.4 million in the fourth quarter of 2014, a 14.0% increase from $37.2 million in the fourth quarter of 2013, driven by strong results for Morningstar® Managed PortfoliosSM and Retirement Solutions. Slightly lower revenue for Investment Advisory services partially offset the increase. • Operating margin was 23.7% in the fourth quarter of 2014, a slight improvement from 23.2% in the same period in 2013. For the full year, operating margin was 13.9%, compared with 24.4% in 2013. Excluding the Business Logic settlement, adjusted operating margin was 21.9% in 2014. Adjusted operating margin is a non-GAAP measure; the accompanying financial tables contain a reconciliation to the comparable GAAP measure.

Cash Flow and Balance Sheet • Consolidated free cash flow was $41.4 million in the fourth quarter of 2014, reflecting cash provided by operating activities of $57.0 million less $15.6 million of cash used for capital expenditures. Free cash flow is a non-GAAP measure; the accompanying financial tables contain a reconciliation to cash provided by operating activities. Morningstar defines free cash flow as cash provided by or used for operating activities less capital expenditures. • As of Dec. 31, 2014, cash, cash equivalents, and investments totaled $224.6 million, compared with $298.6 million as of Dec. 31, 2013. The company had $30.0 million of short-term debt as of Dec. 31, 2014. The company expects to make annual bonus payments of approximately $48 million in the first quarter of 2015, compared with $40 million in the first quarter of 2014. • In the fourth quarter of 2014, the company repurchased approximately 450,000 shares for $30.9 million. Of the $700 million authorized under its share repurchase program, the company had purchased a total of 8.1 million shares for $526.5 million as of Dec. 31, 2014.

Comparability of Year-Over-Year Results Certain items affected the comparability of the company’s 2014 results versus the same periods in 2013:• Fourth-quarter results included $4.6 million in revenue and approximately $5.5 million of incremental operating expense from acquisitions. For the full year, acquired companies contributed revenue of $11.4 million and incremental operating expense of $15.9 million. • Commission expense rose $10.0 million in 2014, or approximately 35%, compared with the prior year, mainly because of a change to the company’s sales commission structure that requires a different accounting treatment. Morningstar now expenses commissions as incurred instead of amortizing them over the term of the underlying contracts. However, the company continued to amortize the prepaid commission balance from its previous commission plan during 2014. • The company’s full-year results included a non-recurring expense of $61.0 million—approximately $38.2 million after taxes, or 85 cents per share—in connection with the Business Logic settlement.

Annual Meeting Investors are invited to attend Morningstar’s annual meeting at 9 a.m. Central Time on Tuesday, May 12, 2015, at its corporate headquarters at 22 W. Washington Street in Chicago. If you are interested in attending, please send an email to investors@morningstar.com.

Investor Communication Morningstar encourages all interested parties—including securities analysts, current shareholders, potential shareholders, and others—to submit questions in writing. Investors and others may send questions about Morningstar’s business to investors@morningstar.com or write to the company at:

Morningstar will make written responses to selected inquiries available to all investors at the same time in Form 8-Ks furnished to the Securities and Exchange Commission, generally on the first Friday of every month.

About Morningstar, Inc.Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. Morningstar provides data on approximately 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 14 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $170 billion in assets under advisement and management as of Dec. 31, 2014. The company has operations in 27 countries.

Caution Concerning Forward-Looking StatementsThis press release contains forward-looking statements as that term is used in the Private Securities Litigation Reform Act of 1995. These statements are based on our current expectations about future events or future financial performance. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, and often contain words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue.” These statements involve known and unknown risks and uncertainties that may cause the events we discuss not to occur or to differ significantly from what we expect. For us, these risks and uncertainties include, among others, liability for any losses that result from an actual or claimed breach of our fiduciary duties; failing to differentiate our products and continuously create innovative, proprietary research tools; failing to respond to technological change, keep pace with new technology developments, or adopt a successful technology strategy; a prolonged outage of our database and network facilities; any failures or disruptions in our electronic delivery systems and the Internet; liability and/or damage to our reputation as a result of some of our pending litigation; liability related to the storage of personal information about our users; general industry conditions and competition, including global financial uncertainty, trends in the mutual fund industry, and continued growth in passively managed investment vehicles; the effect of market volatility on revenue from asset-based fees; failing to maintain and protect our brand, independence, and reputation; changes in laws applicable to our investment advisory or credit rating operations, compliance failures, or regulatory action; and challenges faced by our non-U.S. operations, including the concentration of development work at our offshore facilities in China and India. A more complete description of these risks and uncertainties can be found in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2013. If any of these risks and uncertainties materialize, our actual future results may vary significantly from what we expected. We do not undertake to update our forward-looking statements as a result of new information or future events.

Morningstar presents operating income and operating margin excluding the litigation settlement (adjusted operating income and adjusted operating margin) to show the effect of this non-recurring charge, better reflect period-over-period comparisons, and improve overall understanding of Morningstar’s current and future financial performance.

In addition, Morningstar presents free cash flow solely as supplemental disclosure to help investors better understand how much cash is available after Morningstar spends money to operate its business. Morningstar uses free cash flow to evaluate its business. Free cash flow should not be considered an alternative to any measure required to be reported under GAAP (such as cash provided by (used for) operating, investing, and financing activities).

For more information about these non-GAAP measures, please see the reconciliations provided in the accompanying financial tables.

All dollar and percentage comparisons, which are often accompanied by words such as "increase," "decrease," "grew," "declined, " or "was similar" refer to a comparison with the same period in the previous year unless otherwise stated.